DWS Premier Investments Funds

Transcription

1 Deutsche Asset Management (Asia) Ltd DWS Premier Investments Funds Prospectus Registered on 30 September 2011 DWS Singapore Equity Fund DWS India Equity Fund DWS China Equity Fund DWS Singapore Small/Mid Cap Fund DWS Asian Small/Mid Cap Fund DWS Global Themes Equity Fund DWS Global Clean Tech Fund

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3 DWS PREMIER INVESTMENTS FUNDS Directory Managers Deutsche Asset Management (Asia) Limited (Registration No N) Registered Address One Raffles Quay #17-10 Singapore Business Address One Raffles Quay #15-00 South Tower Singapore Trustee HSBC Institutional Trust Services (Singapore) Limited 21 Collyer Quay #14-01 HSBC Building Singapore Auditors KPMG LLP 16 Raffles Quay #22-00 Hong Leong Building Singapore Solicitors to the Managers Tan Peng Chin LLC 30 Raffles Place #11-00 Chevron House Singapore Solicitors to the Trustee Allen & Gledhill LLP One Marina Boulevard #28-00 Singapore

4 DWS PREMIER INVESTMENTS FUNDS Important Information The collective investment schemes offered pursuant to this prospectus are constituted in Singapore and are each an authorised scheme under the Securities and Futures Act, Chapter 289 of Singapore ( SFA ). A copy of this prospectus has been lodged with and registered by the Monetary Authority of Singapore ( MAS ). This prospectus has been prepared in accordance with the requirements of the SFA. MAS assumes no responsibility for the contents of this prospectus and the registration of this prospectus by MAS does not imply that the SFA or any other legal or regulatory requirements have been complied with. MAS has not, in any way, considered the investment merits of the collective investment schemes. The date of registration of this prospectus with MAS is 30 September This prospectus shall be valid for a period of 12 months from the date of registration up to and including 29 September 2012 and shall expire on 30 September The managers of DWS Premier Investments Funds (the Fund ), Deutsche Asset Management (Asia) Limited (the Managers ), accept responsibility for the accuracy of information contained in this prospectus and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no material facts the omission of which would make any statement in this prospectus misleading. Unless otherwise stated, all terms not defined in this prospectus have the same meanings as used in the trust deed (as amended) constituting and relating to the Fund (the Deed ). Investors should consult the relevant provisions of the Deed and obtain independent professional advice in the event of any doubt or ambiguity. Please note that the Code on Collective Investment Schemes issued by MAS (the Code ) will be amended with effect from 1 October 2011 and the Fund will be subject to the revised Code. The units offered pursuant to this prospectus (the Units ) will not be listed on any securities exchange. There is no ready market for the Units. Any holder of Units (a Holder ) may request the Managers to realise all or part of his holding of Units in accordance with and subject to the provisions of the Deed. This prospectus does not constitute an offer or solicitation to anyone in any jurisdiction in which such offer or solicitation is not authorised or in which the person making such offer or solicitation is not qualified to do so or to anyone to whom it is unlawful to make such an offer or solicitation. In particular, the Units have not been and will not be offered for sale or sold in the United States of America, its territories or possessions and all areas subject to its jurisdiction, or to United States Persons, except in a transaction which does not violate the securities laws of the United States of America. The Units may be offered for sale and sold to Non-United States Persons. If at any time it shall come to the knowledge of the Managers that any Units are held by or in the beneficial ownership or under the control of a United States Person, the Managers shall have the right on giving, written notice, to purchase such Units from the holder at the realisation price (as described in paragraph 13.3 of this prospectus) or to require the holder to transfer all such Units to a person who is a Non-United States Person. The term Non-United States Person shall mean: (a) a natural person who is not a resident of the United States; (b) a partnership, corporation or other entity, other than an entity organised principally for passive investment, organised under the laws of a non U.S. jurisdiction and which has its principal place of business in a non-u.s. jurisdiction; (c) an estate or trust, the income of which is not subject to United States income tax regardless of source; (d) an entity organised principally for passive investment such as a pool, investment company or other similar entity, provided, that units of participation in the entity held by persons who do not qualify as Non-United States Persons or otherwise as qualified eligible persons under U.S. Commodity Futures Trading Commission ( CFTC ) Regulation 4.7 promulgated under the U.S. Commodity Exchange Act represent in the aggregate less than 10% of the beneficial interest in the entity, and that such entity was not formed principally for the purpose of facilitating investment by persons who do not qualify as Non-United States Persons in a 3

5 pool with respect to which the operator is exempt from certain requirements of part 4 of the CFTC's regulations by virtue of its participants being Non-United States Persons; and (e) a pension plan for the employees, officers or principals of an entity organised and with its principal place of business outside the United States. The term United States Person or US Person shall mean (a) a citizen or resident of the United States of America; (b) a partnership or corporation organised or incorporated under the laws of any state, territory or possession of the United States of America; (c) any estate or trust, other than an estate or trust which income from sources outside the United States of America is not includable in its gross income for the purpose of computing United States income tax payable by it; or (d) a person deemed as a US person under Rule 902 of Regulation S promulgated under the U.S. Securities Act of 1933 (as amended). The delivery of this prospectus or the issue of Units shall not, under any circumstances, create any impression that the affairs of the Fund have not changed since the date of this prospectus. This prospectus may be updated from time to time to reflect material changes and investors should investigate whether an updated prospectus is available. Investors should seek professional advice to ascertain (a) the possible tax consequences, (b) the legal requirements and restrictions, (c) any foreign exchange restrictions or exchange control requirements which they may encounter under the laws of the countries of their citizenship, residence or domicile, and (d) any restrictions or requirements under the Central Provident Fund (Investment Schemes) Regulations, which may be relevant to the subscription, holding or disposal of Units and should inform themselves of and observe all applicable laws and regulations of any relevant jurisdiction that may be applicable to them. Investors should also consider the risks of investing in each of the collective investment schemes and the particular investment objectives, focus and approach of each collective investment scheme that are set out in this prospectus. Please note that some of the collective investment schemes and/or Underlying Funds (as defined below) may invest into financial derivatives for hedging, efficient portfolio management and/or optimising returns. Investors should read the relevant Appendices of each Sub-Fund for details. The Managers, the Sub-Managers (as defined in the relevant Appendices), their related entities or employees may from time to time hold positions in one or any of the collective investment schemes offered in this prospectus. All enquiries in relation to the Fund should be directed to the Managers or any distributor appointed by the Managers. 4

6 DWS PREMIER INVESTMENTS FUNDS Table of Contents Page No. Directory... 2 Important Information Structure of DWS Premier Investments Funds The Managers The Trustee and the Custodian The Register of Holders and the Registrar The Auditors Investment Objectives, Focus and Approach Inclusion under the CPF Investment Scheme Fees and Charges Risks Subscription of Units Regular Savings Plan Cancellation of Subscriptions by Investors Realisation of Units Exchange, Switch and Conversion of Units Obtaining Prices of Units Suspension of Dealing Performance and Benchmark Soft Dollar Commissions and Arrangements Conflicts of Interest Reports Exemptions from Liability Other Material Information Queries and Complaints APPENDIX 1 DWS SINGAPORE EQUITY FUND APPENDIX 2 DWS INDIA EQUITY FUND APPENDIX 3 DWS CHINA EQUITY FUND APPENDIX 4 DWS SINGAPORE SMALL/MID CAP FUND APPENDIX 5 DWS ASIAN SMALL/MID CAP FUND APPENDIX 6 DWS GLOBAL THEMES EQUITY FUND APPENDIX 7 DWS GLOBAL CLEAN TECH FUND

7 DWS PREMIER INVESTMENTS FUNDS 1. Structure of DWS Premier Investments Funds 1.1 DWS Premier Investments Funds (the Fund ) is an umbrella unit trust under which the Managers may establish sub-funds to be managed as separate and distinct trusts. The Fund is currently offering units (the Units ) in the following sub-funds (each a Sub-Fund ) which are each constituted in Singapore: (a) (b) (c) (d) (e) (f) (g) DWS Singapore Equity Fund DWS India Equity Fund DWS China Equity Fund DWS Singapore Small/Mid Cap Fund DWS Asian Small/Mid Cap Fund* DWS Global Themes Equity Fund DWS Global Clean Tech Fund *DWS Asian Small/Mid Cap Fund may be closed to new subscriptions from time to time, as the Managers may in their absolute discretion decide. Investors should contact the Managers for details on the availability of subscription into this Sub-Fund. 1.2 Each of DWS Asian Small/Mid Cap Fund and DWS Global Clean Tech Fund, is structured as a feeder fund, investing all or substantially all of each of its assets in a corresponding underlying sub-fund (the Underlying Fund ) under DWS Invest. DWS Invest is a multiportfolio investment company with variable capital incorporated under the laws 1 of the Grand Duchy of Luxembourg as a Société d Investissement à Capital Variable ( SICAV ). DWS Invest is organised under Part I of the Luxembourg Law of 17 December 2010 (the 2010 Law ) and conforms to the provisions of Directives 2009/65/EC as well as the provisions of the Ordinance of the Grand Duchy dated 8 February 2008 pertaining to certain definitions of the amended law of 20 December on Undertakings for Collective Investment ( Ordinance of the Grand Duchy dated 8 February 2008 ), via which Directive 2007/16/EC 3 ( Directive 2007/16/EC ) was implemented in Luxembourg law. With regard to the provisions contained in Directive 2007/16/EC and in the Ordinance of the Grand Duchy dated 8 February 2008, the guidelines of the Committee of European Securities Regulators (CESR) set out in the document CESR s guidelines concerning eligible assets for investment by UCITS, as amended, provide a set of additional explanations that are to be observed in relation to the financial instruments that are applicable for UCITS falling under Directive 2009/65/EC, as amended. DWS Investment S.A. has been appointed as the management company of DWS Invest (the Management Company ). The Management Company performs investment management, administration and distribution duties for DWS Invest in accordance with the 2010 Law. The Management Company is a public limited company under Luxembourg law and a subsidiary of Deutsche Bank Luxembourg S.A. and DWS Investment GmbH, Frankfurt/Main, Germany. It is established for an indeterminate time and has been managing collective investment schemes and discretionary funds since The Management Company may, in compliance with the regulations of the 2010 Law, delegate one or more tasks to third parties under its supervision and control. This includes the appointment of investment managers (if any) as described in the relevant Appendices for DWS Asian Small/Mid Cap Fund and DWS Global Clean Tech Fund. As permitted under UCITS, financial derivatives may be used as part of the investment strategy of the Underlying Funds and not merely for efficient portfolio management or hedging purposes. 1 The Law on Undertakings for Collective Investment and the Law on Trading Companies of 10 August Replaced by the Luxembourg Law of 17 December Directive 2007/16/EC was adopted by the Commission on 19 March 2007 for the purposes of implementing Council Directive 85/611/EEC on the coordination of laws, regulations and administrative provisions relating to certain undertakings for collective investment in transferable securities ( UCITS ) in regard to the explanation of specific definitions. 6

8 Investors should refer to the relevant Appendices for DWS Asian Small/Mid Cap Fund and DWS Global Clean Tech Fund for additional information relating to the Underlying Fund s use of financial derivatives, risk management approach, specific risks and warnings arising from the techniques applied, and the investor risk profile of the Underlying Funds. 1.3 The classes of Units offered in each Sub-Fund are set out below: Sub-Fund Classes of Units DWS Singapore Equity Fund Class A Class B Class M DWS Singapore Small/Mid Cap Fund Class A Class B Class I DWS Asian Small/Mid Cap Fund Class A Class B Class I DWS Global Themes Equity Fund Class A Class B Class I DWS Global Clean Tech Fund Class A Class B Class I DWS India Equity Fund Class A Class B Class I Deutsche India Equity Fund Class J DWS China Equity Fund Class A Class B Class I Class J Class J and Deutsche India Equity Fund Class J Units will be offered only to collective investment schemes established outside of Singapore. References to Units in this prospectus will denote either each class or all relevant classes of Units within each Sub-Fund described above (as the case may be). Classes of Units may differ in terms of the rate of Management Fee and if applicable, Performance Fee payable, the minimum threshold amounts relating to subscription, holding and realisation, and the availability of participation in the Regular Savings Plan. Save for these differences, details of which are set out at paragraphs 8, 10.2, 11 and 13.2 of this prospectus, the Holders of each class have materially the same rights and obligations under the Deed. Investors should note that the assets of a Sub-Fund are pooled and invested as a single fund. They are not segregated in respect of each class. New classes of Units may be established and the Units in any existing class may be redesignated so long as there is no prejudice to the existing Holders of such class as a whole. 1.4 The general provisions applying to all Sub-Funds are set out in the main body of this prospectus while details specific to each Sub-Fund are set out in the following Appendices: Sub-Fund Appendix DWS Singapore Equity Fund 1 DWS India Equity Fund 2 DWS China Equity Fund 3 DWS Singapore Small/Mid Cap Fund 4 DWS Asian Small/Mid Cap Fund 5 DWS Global Themes Equity Fund 6 DWS Global Clean Tech Fund Trust deed and supplemental deeds The deed of trust relating to the interests being offered for subscription or purchase is dated 28 November 2003 (the Principal Deed ). The parties to the Principal Deed are Deutsche Asset Management (Asia) Limited as the managers (the Managers ) and Bermuda Trust (Singapore) Limited (now known as HSBC Institutional Trust Services (Singapore) Limited) as the trustee (the Trustee ) The Principal Deed has been amended by the following deeds (collectively, the Supplemental Deeds ) 7

9 Dated Supplemental Deed 11/06/2004 First Amending and Restating Deed 13/07/2004 Second Amending and Restating Deed 26/08/2004 Third Amending and Restating Deed 02/11/2004 Fourth Amending and Restating Deed 28/10/2005 Fifth Amending and Restating Deed 31/03/2006 Sixth Amending and Restating Deed 29/06/2006 Seventh Amending and Restating Deed 17/07/2006 Eight Amending and Restating Deed 03/10/2006 Ninth Amending and Restating Deed 03/01/2007 Tenth Amending and Restating Deed 29/06/2007 Eleventh Amending and Restating Deed 12/07/2007 Twelfth Amending and Restating Deed 1/07/2008 Thirteenth Amending and Restating Deed 19/01/2009 Fourteenth Amending and Restating Deed 17/06/2009 Fifteenth Amending and Restating Deed 12/03/2010 Sixteenth Amending and Restating Deed 18/11/2010 Seventeenth Amending and Restating Deed 30/09/2011 Eighteenth Amending and Restating Deed The Principal Deed as amended by the Supplemental Deeds will be referred to as the Deed The terms and conditions of the Deed and any supplemental deeds are binding on each holder of Units (each a Holder ) and persons claiming through such Holder as if such Holder had been a party to the Deed and as if the Deed contained covenants on the part of each Holder to observe and be bound by the provisions of the Deed and an authorisation by each Holder to do all such acts and things as the Deed may require the Managers and/or the Trustee to do A copy of the Deed and any supplemental deeds is available for inspection, free of charge, during usual business hours at the business address of the Managers at One Raffles Quay, #15-00 South Tower, Singapore and will be supplied by the Managers to any person upon request at a charge of S$25 per copy of the document (or such amount as the Managers and the Trustee may agree). 2. The Managers The Managers of the Fund are Deutsche Asset Management (Asia) Limited, whose business address is at One Raffles Quay, #15-00 South Tower, Singapore Deutsche Asset Management group is one of the world s leading investment management organisations, with approximately Euros 523 billion (as at 30 June 2011) in assets under management globally. Deutsche Asset Management s global team of investment professionals is dedicated to serving clients around the clock and across the globe. Their investment professionals strive to deliver out-performance and to develop new products to meet client s investment needs. Deutsche Asset Management group is geographically divided into three regions, the Americas (covering North America and South America), Europe and Asia Pacific, providing the full range of investment management products across the risk/return spectrum. The Managers have been managing collective investment schemes and discretionary funds in Singapore since Sub-Managers and investment advisors may be appointed in respect of a Sub-Fund. Details of such appointments (if any) are set out in the relevant Appendix for the Sub-Fund. 8

10 Please refer to the Deed for details on the Managers role and responsibilities. 3. The Trustee and the Custodian The Trustee of the Fund is HSBC Institutional Trust Services (Singapore) Limited, whose registered address is at 21 Collyer Quay, #14-01 HSBC Building, Singapore The Trustee also acts as custodian of DWS Asian Small/Mid Cap Fund and DWS Global Clean Tech Fund. The custodian of the other Sub-Funds is State Street Bank and Trust Company, whose registered address is at 225 Franklin Street, Boston, MA 02110, United States of America. Other custodians may be appointed from time to time in respect of a Sub- Fund or any of its assets. Please refer to the Deed for details on the Trustee s role and responsibilities. 4. The Register of Holders and the Registrar The registrar of the Fund is the Trustee and the register of the Holders (the Register ) is kept and maintained at 20 Pasir Panjang Road (East Lobby), #12-21 Mapletree Business City, Singapore The Register is accessible to the public during normal business hours and is conclusive evidence of the number of Units of the relevant Sub-Fund held by each Holder. The entries in the Register shall prevail over the details appearing on any statement of holdings, unless the Holder proves to the satisfaction of the Managers and the Trustee that the Register is incorrect. 5. The Auditors The auditors of the accounts relating to the Fund are KPMG LLP whose registered office is at 16 Raffles Quay, #22-00 Hong Leong Building, Singapore Investment Objectives, Focus and Approach The investment objectives, focus and approach of each Sub-Fund are set out in the relevant Appendix for that Sub-Fund. 7. Inclusion under the CPF Investment Scheme Some of the Sub-Funds are included under the Central Provident Fund Investment Scheme ( CPFIS ). Details are set out in the relevant Appendix for these Sub-Funds. The CPF interest rate for the CPF Ordinary Account is based on the 12-month fixed deposit and month-end savings rates of the major local banks and is revised by the CPF Board quarterly. Under the Central Provident Fund Act (Chapter 36) of Singapore (the CPF Act ), the CPF Board currently pays a legislated minimum annual interest rate of 2.5% on monies in the CPF Ordinary Account. The interest is computed monthly and is credited and compounded annually. The interest rate for the CPF Special and Medisave Accounts ( SMA ) is pegged to either the 12-month average yield of 10-year Singapore government securities ( 10YSGS ) plus 1%, or 4%, whichever is higher, adjusted quarterly. The interest rate to be credited to the CPF Retirement Account ( RA ) will be the weighted average interest of the entire portfolio of Special Government Securities ( SSGS ), adjusted yearly in January, in which the RA savings are invested in, which earn a fixed coupon equal to either the 12-month average yield of the 10YSGS plus 1% at the point of issuance, or 4%, whichever is higher, adjusted yearly. For 2011, the minimum interest rate for the SMA and RA is 4.0% per annum. After 31 December 2011, the 2.5% per annum legislated minimum interest rate, as prescribed by the CPF Act, will apply to the SMA and RA. In addition, the CPF Board pays an extra interest rate of 1% per annum on the first S$60,000 of a CPF member's combined balances, including up to S$20,000 in the CPF Ordinary 9

11 Account. The first S$20,000 in the CPF Ordinary Account and the first S$40,000 in the CPF Special Account are not allowed to be invested under the CPFIS. Investors should note that the applicable interest rates for each of the CPF accounts may be varied by the CPF Board from time to time. Investments using CPF monies shall at all times be subject to the regulations and such directives or requirements imposed by the CPF Board from time to time. 8. Fees and Charges The fees and charges payable in relation to each Sub-Fund are set out in the relevant Appendix for that Sub-Fund. Investors should refer to the Deed for (i) the full meaning and method of computation of the various fees and charges and (ii) the full meaning of the term Net Asset Value as appearing in the Appendices. Subject to agreement with the relevant parties, other fees and charges (such as audit, registrar, custody and valuation fees) may exceed 0.1% p.a. of the Net Asset Value of a Sub- Fund, depending on the proportion that each fee or charge bears to the Net Asset Value of that Sub-Fund. There may also be further fees and charges such as printing costs, professional fees, goods and services tax ( GST ) and other out-of-pocket expenses (each of which the Managers currently do not expect to exceed 0.1% of the Net Asset Value of each Sub-Fund) charged to the Sub-Funds. The accrued amount of these other fees and charges in respect of each Sub-Fund as based on the figures in the Fund s latest audited accounts is set out in the relevant Appendix. The authorised distributors may impose and retain the Preliminary Charge and Realisation Charge (as described in each Appendix). Some distributors may charge other fees which are not listed in this prospectus, depending on the specific nature of services provided by the distributors. Investors should check with the relevant distributor for details. The authorised distributors may waive or reduce the Preliminary Charge or Realisation Charge including where investors exchange, switch or convert their Units as described at paragraph 14 of this prospectus. As at the date of registration of this prospectus, the net discounted charges payable by an investor upon an exchange, switch or conversion of units is 1%. Investors should note that a Sub-Fund may also invest into other funds (apart from the underlying funds, if any, stated in the relevant Appendix), for which fees and charges may be imposed at the underlying fund level. As the investments in these other funds currently do not exceed 10% of the Net Asset Value of each of the Sub-Fund, the breakdown of the other funds fees and charges will not be disclosed in this prospectus. 9. Risks 9.1 Risk warnings Investments in collective investment schemes are intended to produce returns over the medium to long term and are not suitable for short-term speculation. Investors should be aware that the price and value of the Units, and the income deriving or accruing from them, may fall or rise, and that there is the possible loss of the original amount invested. The Managers give no assurance that the investment objectives of any of the Sub-Funds (or, where relevant, any Underlying Fund) will be met. Before investing in any of the Sub-Funds, investors should consider and satisfy themselves as to the risks of investing in that Sub-Fund. The risks described below are not exhaustive and investors should be aware that the Sub-Funds and the Underlying Funds might be exposed to other risks of an exceptional nature from time to time. Investors should also note that the degree to which these risks affect investments in a collective investment scheme varies depending on the scheme s investment objectives, approach and focus and they should also consider the risks specific to each Sub-Fund as set out in the relevant Appendix for that Sub- Fund. 10

12 (a) (b) (c) (d) (e) (f) Investment in securities is subject to general market, political and economic conditions and the value of securities fluctuate in response to the activities and performance results of the companies invested into. Under certain market conditions, it may be difficult or impossible to liquidate or rebalance positions. For example, this may occur during volatile markets or crisis situations or where trading under the rules of the relevant stock exchange is suspended, restricted or otherwise impaired. During such times, the Sub-Fund may be unable to dispose of certain assets due to thin trading or lack of a market or buyers. Placing a stop-loss order may not necessarily limit a Sub-Fund's losses to intended amounts as market conditions may make it impossible to execute such an order at the ideal price. In addition, such circumstances may force the Sub-Fund to dispose of assets at reduced prices, thereby adversely affecting the Sub-Fund's performance. Further, such investments may be difficult to value with any degree of accuracy or certainty. The dumping of securities in the market could further deflate prices. If the Sub-Fund incurs substantial trading losses, the need for liquidity could rise sharply at the same time that access to liquidity is impaired. Further, in a market downturn, the Sub-Fund's counterparties' financial conditions could be weakened, thereby increasing the Sub-Fund's credit risk to them. Securities in emerging markets and some Asia markets may be more volatile than securities of developed markets. This volatility may stem from political, economic, legal, trading liquidity, currency and interest rate factors. There may also be the possibility of changes in government policies in some of these markets that may affect the ability to repatriate capital, income and proceeds. The securities may also be less liquid, which will affect the ability to acquire or dispose of these securities at the desired price and time. The laws and regulatory framework of these countries may be less stringent and the disclosure, accounting, auditing and financial standards may differ significantly from internationally recognised standards. As a result, information on the company s accounts of such securities may not be an accurate reflection of its financial position. Unlisted securities may involve a high degree of business and financial risks as these securities are less liquid than listed securities. Further, the issuers of such securities may not be subject to the same disclosure and investor protection measures that are applicable to listed securities. Investments in warrants may involve higher risks than investments in ordinary shares. When a Sub-Fund invests in warrants, the values of these warrants are likely to fluctuate more than the prices of the underlying securities because of the greater volatility of warrant prices. The assets and income of a Sub-Fund may be denominated in a number of different currencies other than the Singapore Dollar and will thus be subject to fluctuations in currency exchange rates and in certain cases, exchange control regulations. The Managers and Sub-Managers may fully or partially hedge the assets of the Sub-Fund back to the Singapore Dollar if they deem this appropriate for the Sub-Fund. In such event, the Managers make forecasts of currency exchange rates under different scenarios based on their analysis of fundamental, technical and valuation factors that influence currency movements. These forecasts are compared with the costs of hedging non-singapore Dollar currencies. Non-Singapore Dollar currency exposures are usually hedged when the expected impact of currency movements are, in the Managers or Sub-Managers reasonable opinion, adverse and more than outweigh the cost of hedging. For Sub-Funds structured as feeder funds, the Managers do not intend to hedge the currency exposure of investing into the Underlying Fund. The prices of Units may be quoted in a currency other than the base currency of the Sub-Fund. Changes in the exchange rate between the base currency and the quoted currency may lead to a depreciation of the value of such Units as expressed in the quoted currency. The Managers may, but currently do not intend, to hedge against such exchange rate risks. Where a class of Units is designated in a currency other than the base currency, the Manager may or may not mitigate the exchange rate risk to the extent of the Net Asset Value attributed to such class. Although the financial instrument used to mitigate the risk is not in relation to the other classes of Units within 11

13 the Sub-Fund, the financial instrument will comprise the assets (or liabilities) of the Sub-Fund as a whole. The gains (or losses) on and the costs of the relevant financial instruments will however accrue solely to the relevant class of Units of the Sub-Fund. (g) (h) (i) (j) (k) (l) The value of bonds and fixed income instruments are subject to interest rate fluctuations and credit risks, such as risk of default by issuers. The Sub-Funds and the Underlying Funds may be subject to tax exposure on their underlying investments, whether in Singapore or elsewhere. Any such tax exposure will be borne by the Sub-Fund or Underlying Fund (as the case may be) and may impact the Sub-Fund s value. The insolvency of any counterparty, including a custodian, can adversely affect the ability of such counterparty to meet its payment obligations to any Sub-Fund or Underlying Fund. The insolvency of a counterparty may lead to the forced liquidation or closing of a Sub-Fund's position held with it and the Sub-Fund may not recover the investments already made. Credit ratings of instruments invested into by a Sub-Fund or Underlying Fund represent the opinions of the Managers, the Sub-Managers, the Investment Managers (as defined in the relevant Appendices) and/or the rating agencies (as the case may be), regarding the credit quality of the instrument or institution and are not a guarantee of quality. Rating methodologies generally rely on historical data, which may not be predictive of future trends and adjustments to credit ratings in response to subsequent change of circumstances may take time. The Managers are entitled to rely, without independent investigation, upon pricing information and valuations furnished to the Sub-Fund by third parties, including pricing services and independent brokers/dealers. Their accuracy depends on these parties' methodology, due diligence and timely response to changing conditions. The Managers cannot be held responsible for any failures by such parties in their valuations. The Managers may accept subscriptions from institutional investors and such subscriptions may constitute a large portion of the total investments in a Sub-Fund. Whilst these institutional investors will not have any control over the Managers' investment decisions, the actions of such investors may have a material effect on the Sub-Fund. For example, substantial realisations of Units by an institutional investor over a short period of time could necessitate the liquidation of the Sub-Fund's assets at a time and in a manner which does not provide the most economic advantage to the Sub-Fund and which could therefore adversely affect the value of the Sub-Fund's assets. 9.2 Investment in financial derivatives General Unless otherwise specified in the relevant Appendix for the Sub-Fund, the Managers and Sub- Managers (where applicable) may use financial derivatives (which may include currency forwards, currency options, bond futures, warrants, swaps and options) to a limited degree and only where the relevant investment guidelines permit. The Managers and Sub-Managers will ensure that the risk management and compliance procedures and controls adopted are adequate and have been or will be implemented. The Managers and Sub-Managers (as the case may be) have the necessary expertise to control and manage the risks relating to the use of financial derivatives. The Managers and Sub-Managers (as the case may be) may modify the risk management and compliance procedures and controls as they deem fit and in the interests of the Sub-Fund. The global exposure of each Sub-Fund to financial derivatives or embedded financial derivatives (if any) will not exceed 100% of the Net Asset Value of the Sub-Fund at all times. The Managers and Sub-Managers (as the case may be) will apply a commitment approach to determine the Sub-Fund s global exposure to financial derivatives by converting the positions in the financial derivatives into equivalent positions in the underlying assets embedded in 12

14 those financial derivatives and will with effect from 1 October 2011, calculate such exposures in accordance with Appendix 1 of the Code. The use of financial derivatives involves increased risk. The successful use of such instruments depends on the ability to accurately predict movements in stock prices, interest rates, currency exchange rates or other economic factors and the availability of liquid markets. If the predictions are wrong, or if the financial derivatives do not work as anticipated, it may result in greater losses than if financial derivatives had not been used. If over-the-counter (OTC) derivatives are used, there is increased risk that the counterparty may fail to honour its contract. Risks are also greater for instruments not traded on a recognised market, which are afforded less protection as may apply to participants trading futures or options on organised exchanges, such as the performance guarantee of an exchange clearing house. The volatility of these securities is not constant. For example, changes in volatility may impact on the value of certain options, especially for out-of-the-money options. Volatility also tends to be mean reverting. When volatility reaches a very high level, the value of these securities is more likely to decline than to rise. Conversely, when volatility reaches a very low level the value of these securities is more likely to rise than to decline. Investment in financial derivatives by DWS Invest The Underlying Funds of DWS Asian Small/Mid Cap Fund and DWS Global Clean Tech Fund may from time to time use financial derivatives for the purposes of hedging and/or efficient portfolio management. Where specified in the relevant Appendix for the Sub-Fund, the Underlying Fund may also use financial derivatives as part of its investment strategy. The use of financial derivatives is subject to an appropriate risk management system being in place. (a) Financial derivatives used in respect of DWS Invest Trading in financial derivatives is conducted within the confines of the investment limits and provides for the efficient management of the Underlying Fund s assets, while also regulating investment maturities and risks. Swaps The Management Company may conduct the following swap transactions for the account of the respective Underlying Fund within the scope of the investment principles: - interest-rate swaps - currency swaps - equity swaps - credit default swaps - total return swaps Swap transactions are exchange contracts in which the parties swap the assets or risks underlying the respective transaction. Swaptions Swaptions are options on swaps. A swaption is the right, but not the obligation, to conduct a swap transaction, the terms of which are precisely specified, at a certain point in time or within a certain period. Credit default swaps Credit default swaps are credit derivatives that enable the transfer of a volume of potential credit defaults to other parties. As compensation for accepting the credit default risk, the seller of the risk (the protection buyer) pays a premium to its counterparty. In all other aspects, the information for swaps applies accordingly. 13

15 Synthetic Dynamic Underlying (SDU) The respective Underlying Fund may use SDU, if (i) an appropriate risk management system is in place and (ii) such investment is in compliance with the relevant investment policy and the investment restrictions of such Underlying Fund. In such case the relevant Underlying Fund may participate via specific instruments in accordance with Article 41(1)(g) of the 2010 Law such as swaps and forwards in the performance of a synthetic portfolio notionally comprised of certain cash instruments, credit derivative transactions and other investments. Should the synthetic portfolio comprise of any derivative components, it will be ensured that the relevant underlying of such derivative components will only contain eligible assets for a UCITS IV compliant investment fund. The synthetic portfolio will be managed by a first class financial institution who determines the composition of the synthetic portfolio and who is bound by clearly defined portfolio guidelines. The valuation of the synthetic assets will be ensured at or after cut-off time of the respective Underlying Fund and risk reports will be issued. Furthermore these investments are subject to Article 43(1) of the 2010 Law and to Article 8 of the Ordinance of the Grand Duchy dated 8 February Financial instruments certificated in securities The respective Underlying Fund may also acquire the financial instruments described above if they are certificated in securities. The transactions pertaining to financial instruments may also be just partially contained in such securities (e.g. warrant-linked bonds). The statements on opportunities and risks apply accordingly to such certificated financial instruments, but with the condition that the risk of loss in the case of certificated instruments is limited to the value of the security. OTC derivative transactions The respective Underlying Fund may conduct both those derivative transactions admitted for trading on an exchange or included in another regulated market and overthe-counter (OTC) transactions. It shall include a process for accurate and independent assessment of the value of OTC derivative instruments. (b) Risk management in respect of DWS Invest The Underlying Fund shall include a risk management process that enables DWS Invest to monitor and measure at any time the risk of the positions and their contribution to the overall risk profile of the portfolio. The Management Company monitors the Underlying Funds in accordance with the requirements of Ordinance of the Commission de Surveillance du Secteur Financier ( CSSF ) and the Luxembourg or European directives issued from time to time, in particular CSSF Circular dated 30 May 2011 and the Guidelines on Risk Measurement and the Calculation of Global Exposure and Counterparty Risk for UCITS by the Committee of European Securities Regulators (CESR/10-788). The overall risk associated with financial derivatives pursuant to Article 42(3) of the 2010 Law does not exceed 100% of the net assets of the Underlying Fund, and that the market risk of the Underlying Fund does not exceed 200% of the market risk of the reference portfolio that does not contain derivatives. The risk management approach used for the respective Underlying Fund is indicated in the relevant Appendix for the Sub-Fund. The Management Company generally seeks to ensure that the level of investment of the Underlying Fund through the use of financial derivatives does not exceed twice the value of the Underlying Fund s assets (hereinafter, leverage effect ) unless otherwise expressly provided for the Underlying Fund. However, this leverage effect does fluctuate depending on market conditions and/or changes in positions (including hedging against unfavourable market movements, among other factors), and the 14

16 targeted level may therefore be exceeded in spite of constant monitoring by the Management Company. In addition, the option to borrow 10% of net assets is available for the Underlying Fund, provided that this borrowing is temporary and the borrowing proceeds are not used for investment purposes. An overall commitment thus increased can significantly increase both the opportunities and the risks associated with an investment. Investors may obtain supplementary information relating to the risk management methods employed by the Underlying Funds, including the quantitative limits that are applied and any recent developments in the risk and yield characteristics of the main categories of investments, by contacting the Managers. 9.2 Securities lending and repurchase transactions The Sub-Funds and Underlying Funds (where applicable) may enter into securities lending and repurchase transactions if so indicated in the relevant Appendix for the Sub-Fund. (a) Securities lending in relation to DWS Invest The Underlying Funds of DWS Asian Small/Mid Cap Fund and DWS Global Clean Tech Fund may unless further restricted by the investment policies of the Underlying Fund as described in the relevant Appendices for the Sub-Funds, enter into securities lending and borrowing transactions. The applicable restrictions are set out in CSSF Circular 08/356 as amended from time to time. Those transactions may be entered into for one or more of the following aims: (i) reduction of risk, (ii) reduction of cost and (iii) generation of additional capital or income with a level of risk which is consistent with the risk profile of the relevant Underlying Fund and the applicable risk diversification rules. Those transactions may be carried out for 100% of the assets held by the relevant Underlying Fund provided (i) that their volume is kept at an appropriate level or that DWS Invest or the relevant Investment Manager is entitled to request the return of the securities lent in a manner that enables the Underlying Fund at all times to meet its redemption obligations and (ii) that these transactions do not jeopardise the management of the Underlying Fund s assets in accordance with its investment policy. Their risks shall be captured by the risk management process of DWS Invest. DWS Invest or the relevant Investment Manager may enter into securities lending and borrowing transactions provided that they comply with the following rules: (i) (ii) (iii) (iv) DWS Invest may only lend securities through a standardised system organised by a recognised clearing institution or through a first class financial institution subject to prudential supervision rules which are recognised by the CSSF as equivalent to those laid down in Community law and specialising in this type of transaction; The borrower must be subject to prudential supervision rules considered by the CSSF as equivalent to those prescribed by Community law; The counterparty risk vis-à-vis a single counterparty (which, for the avoidance of doubt, may be reduced by the use of collateral) arising from one or more securities lending transaction(s) may not exceed 10% of the assets of the relevant Underlying Fund when the counterparty is a financial institution falling within Article 41(1)(f) of the 2010 Law, or 5% of its assets in all other cases; As part of lending transactions, DWS Invest must receive collateral, the value of which, during the duration of the lending agreement, must be equal to at least 90% of the global valuation of the securities lent (interests, dividends and other eventual rights included); 15

17 (v) (vi) Such collateral must be received prior to or simultaneously with the transfer of the securities lent. When the securities are lent through intermediaries, the transfer of the securities lent may be effected prior to receipt of the collateral, if the relevant intermediary ensures proper completion of the transaction. Said intermediary may provide collateral in lieu of the borrower; In principle, this collateral must be given in the form of: liquid assets such as cash, short term bank deposits, money market instruments as defined in Directive 2007/16/EC of 19 March 2007, letters of credit and guarantees at first demand issued by a first class credit institution not affiliated to the counterparty and/or bonds issued or guaranteed by a Member State of the OECD or by their local authorities or by supranational institutions and undertakings of a community, regional or worldwide nature; shares or units issued by money market-type UCIs (as defined under Luxembourg Law) calculating a daily net asset value and having a rating of AAA or its equivalent; shares or units issued by UCITS investing mainly in bonds/shares mentioned in the following two indents; bonds issued or guaranteed by first class issuers offering an adequate liquidity; or shares admitted to or dealt in on a regulated market of a Member State of the European Union or on a stock exchange of a Member State of the OECD, provided that these shares are included in a main index; (vii) (viii) (ix) (x) (xi) (xii) The collateral given under any form other than cash or shares/units of a UCI/UCITS shall be issued by an entity not affiliated to the counterparty; When the collateral given in the form of cash exposes DWS Invest to a credit risk vis-à-vis the trustee of this collateral, such exposure shall be subject to the 20% limitation as laid down in Article 43(1) of the 2010 Law. Moreover such cash collateral shall not be safekept by the counterparty unless it is legally protected from consequences of default of the latter; The collateral given in a form other than cash shall not be safekept by the counterparty, except if it is adequately segregated from the latter s own assets; DWS Invest (or its delegates) shall proceed on a daily basis to the valuation of the collateral received. In case the value of the collateral already granted appears to be insufficient in comparison with the amount to be covered, the counterparty shall provide additional collateral at very short term. If appropriate, safety margins shall apply in order to take into consideration exchange risks or market risks inherent to the assets accepted as collateral; It shall be ensured that DWS Invest is able to claim its rights on the collateral in case of the occurrence of an event requiring the execution thereof, meaning that the collateral shall be available at all times, either directly or through the intermediary of a first class financial institution or a wholly-owned subsidiary of this institution, in such a manner that DWS Invest is able to appropriate or realise the assets given as collateral, without delay, if the counterparty does not comply with its obligation to return the securities lent; During the duration of the agreement, the collateral cannot be sold or given as a security or pledged, except if DWS Invest has other means of coverage; and 16

18 (xiii) DWS Invest shall disclose the global valuation of the securities lent in the annual and semi-annual reports. Securities lending may also be conducted synthetically ( synthetic securities lending ). In a synthetic securities loan, a security contained in an Underlying Fund is sold to a counterparty at the current market price. This sale is, however, subject to the condition that the Underlying Fund simultaneously receives from the counterparty a securitised unleveraged option giving the Underlying Fund the right to demand delivery at a later date of securities of the same kind, quality and quantity as the sold securities. The price of the option (the option price ) is equal to the current market price received from the sale of the securities less (a) the securities lending fee, (b) the income (e.g., dividends, interest payments, corporate actions) from the securities that can be demanded back upon exercise of the option and (c) the exercise price associated with the option. The option will be exercised at the exercise price during the term of the option. If the security underlying the synthetic securities loan is to be sold during the term of the option in order to implement the investment strategy, such a sale may also be executed by selling the option at the then prevailing market price less the exercise price. Securities lending transactions may also, as the case may be, be entered into with respect to individual Underlying Fund or share classes of the Underlying Fund, taking into account the specific characteristics of such Underlying Fund or share class and/or its investors, with any right to income and collateral under such securities lending transactions arising at the level of such specific Underlying Fund or share class. (b) Repurchase agreement transactions in relation to DWS Invest Unless otherwise provided for with respect to a specific Underlying Fund as set out in the relevant Appendix for the Sub-Fund, DWS Invest may enter into repurchase agreement transactions which consist of the purchase and sale of securities with a clause reserving the seller the right or the obligation to repurchase from the acquirer the securities sold at a price and term specified by the two parties in their contractual arrangement and (ii) reverse repurchase agreement transactions, which consist of a forward transaction at the maturity of which the seller (counterparty) has the obligation to repurchase the securities sold and DWS Invest the obligation to return the securities received under the transaction (collectively, the repo transactions ). DWS Invest can act either as purchaser or seller in repurchase agreement transactions or a series of continuing repurchase transactions. Its involvement in such transactions is, however, subject to the following rules: (i) (ii) (iii) (iv) DWS Invest may not buy or sell securities using a repurchase agreement transaction unless the counterparty in such transactions is subject to prudential supervision rules considered by the CSSF as equivalent to those prescribed by Community law. The counterparty risk vis-à-vis a single counterparty (which, for the avoidance of doubt, may be reduced by the use of collateral) arising from one or more repo transaction(s) may not exceed 10% of the assets of the relevant Underlying Fund when the counterparty is a financial institution falling within Article 41(1)(f) of the 2010 Law, or 5% of its assets in all other cases; During the life of a repo transaction with DWS Invest acting as purchaser, DWS Invest cannot sell the securities which are the object of the contract, either before the right to repurchase these securities has been exercised by the counterparty, or the repurchase term has expired, except to the extent it has other means of coverage. The securities acquired by DWS Invest under a repo transaction must conform to the Underlying Fund s investment policy and investment restrictions and must be limited to: 17